a holistic view of entrepreneurship in practice in a ... · intended effect on consumer social...

Open Journal of Economics and Commerce

Volume 1, Issue 4, 2018, PP 19-39

ISSN:2638-549X

Open Journal of Economics and Commerce V1 ● 14 ● 2018 19

A Holistic View of Entrepreneurship in Practice in a

Multinational Enterprise

Joel Bigley

Assistant Professor of School of Business,USA *Corresponding Author: Joel Bigley, Assistant Professor of School of Business,USA

INTRODUCTION

William Norris, the founder of Control Data Corporation (CDC), posits that social needs

create business opportunities (Eckstein,

2007).CDC had a payroll of 16,000 employees and revenue of $2.93 billion before it shut down

in 1992 (Encyclopedia.com). Norris was able to

build a very large enterprise meeting the social

needs of people. If his statement about entrepreneurism is true, then social

entrepreneurship abounds almost everywhere

that there is business. Entrepreneurship is pervasive reaching within and reaching

externally to the environment in which it wants

to succeed. Generally, if the business does not meet a need the business will not exist.

The author will take an enterprise perspective to

entrepreneurship as practice (EAP). In this

article, the author will showcase an enterprise with a global supply chain and multiple product

lines as a case study with the aim of advancing

the study of human and behavioral dimensions of entrepreneurship in a synergistic

multinational organization. This specific

complex setting will be used to focus on how

actions can be coordinated to achieve performance expectations (Nicolini, 2012;

Orlikowski, 2002). A scaffolded approach to

organizational entrepreneurship, that guides and

monitors performance, allows an MNE to capture an understanding of unmet needs that

lead to the emergence of products or services,

their availability and reproduction, and the intended effect on consumer social practices

(Schatzki, 2002; 2012).

An enterprise is a culturally shaped achievement

with patterns of behavior and routinized ways designed and implemented by entrepreneurs

(Steyaert, 2007).This paper does not focus on

the person, but rather on the way that innovation is organized in a federated system of profit and

loss (P&L) entities. Furthermore,

entrepreneurship in practice is not limited to product and service design. It is also subject to a

myriad of domains all of which influence the

performance of an organization. Regardless of

the innovation, entrepreneurial practices are deployable and reproducible across the network

that is a multinational corporation. Optimally,

the benefit of the entrepreneurial initiative should be felt in all applicable locations of the

organization.

A case study is a specific setting and a relevant

method to uncover data that otherwise would be overlooked or assumed. The systemic emphasis

exposes insights about the relatedness of

ABSTRACT

Entrepreneurism in practice is pervasive in a multinational organization that wishes to survive in a dynamic

market. Interplay between functional areas, product management, operations management and client

management allow for collaborative behavioral dimensions to emerge. Given a global supply chain, how

does a collaborative entrepreneurial endeavor span time and space to locate and exploit opportunities at

optimal cost while meeting client expectations? To answer this question and provide a more ontological

view of entrepreneurship in practice in a multinational organizational structure, the author showsthrough a

case study that an MNE can realize growth and be agile in spite of its size.In fact, its size is an asset if the

actions are coordinated and guided. The author adds to theory by establishing propositions for growth by leveraging synergies, relatedness and collaboration that enables a federated organizational design

penetrate desirable markets.

Keywords: Collaborative entrepreneurship, Market penetration, Exploitative synergies, Diversification,

Operational synergies, Corporate advantage

A Holistic View of Entrepreneurship in Practice in a Multinational Enterprise


actions, products and practices across the

production system that is a global supply chain. Each co-researcher, or participant, in this case

study say themselves as an entrepreneur. They

functioned within an organizational context known as a multidimensional organizational

system (MOS) that related support, client,

product and location to opportunities for

synergistic growth. This structure epitomizes the way a multinational corporation functions.

Lateral integrative mechanisms linked the

participants and provided a collective support function so that the entrepreneurial capability of

each person could be mobilized and focused on

profitable growth (Johannisson, 2011). The organizational design was able to collect

opportunities from federated locations,

recombine resources through the exploitation of

synergies, manage a diversified and related portfolio, and measure performance to maintain

aligned control. The MNE achieved growth

through the exploitation of organizational design and collaborative efforts.

This article is structured in such a way as to

show that an MNE can realize entrepreneurial

growth in spite of its size. In this article, the author adds to theory by discussing the view in

literature that relates to synergies. Product

diversification and relatedness are critical scaffolding for entrepreneurial efforts. The

objective is both profitability and sustained

advantage, which are discussed next. This is followed by a discussion of the methods used to

collect and analyze the data. This is followed by

the findings from the study. Finally, the

conclusion provides a summary of the study. The author intends to add to theory by

establishing propositions for growth through a

holistic and scaffolded approach to innovation and entrepreneurship throughout a federated

organizational design.

LITERATURE REVIEW

Growth Synergies

The exploitation of growth synergies through

collaborative and coordinated entrepreneurial effort can lead to profitability, pricing power in

the marketplace, the ability to leverage

strengths, and scalability with minimal cost. Growth synergy has generally been neglected in

the literature. Operative synergies, prevalent in

the literature, represent sustained performance

advantages of multi-business firms that leverage operative resources across businesses that

exhibit relatedness. According to Mueller-

Stewens and Knoll (2006),synergies, or

commonalities, are prioritized on corporate

agendas. Unfortunately, growth synergies are typically explored through the lens of product

and service diversification. Empirical studies

typically use operative synergies for describing the impact of process or product relatedness, as

described by the presence of similar activities

and shared resources at various points of the

value chain (Davis & Thomas, 1993). Relatedness may also exist between business

units of diversified firms (Amit &Livnat, 1988;

Berger &Ofek, 1995; Christensen & Montgomery, 1981; Grant &Jammine, 1988;

Lang &Stulz, 1994; Ramanujam&Varadarajan,

1989; Rumelt, 1982; Simmonds, 1990). In order to further contrast operative synergies from

growth synergies, operative synergies are now

discussed more fully.

Operative Synergies

Managers of multi-unit businesses desperately

search for synergies within their businesses.

Studies suggest that they exist (Goold& Campbell, 1998); however, scholars have not

yet established a research perspective for cross-

business synergies in a multi-dimensional

context. The exploitation of operative synergies can lead to profitable corporate growth. This

type of synergy has, to some extent, been

generally neglected in the literature. Operative synergies represent sustained performance

advantages of multi-unit firms which leverage

operative resources, routinized activity, and coordinated actions across businesses that

exhibit relatedness (Martin &Eisenhardt, 2001).

Market Synergies

Conglomerate power, also known as market power synergies, are profitability-based

advantages of MNEs that are exploited by

leveraging relatedness across businesses and market power resources (Dutta, Dutta, & Das,

2011; Martin & Eisenhardt, 2001). Market

power resources include all sources the firm uses for reducing competition and increasing

prices. This synergy is achieved by several

means, including mutual forbearance,

complementary products, reciprocal buying and selling, bundling, and predatory pricing

(Bernheim &Whinston, 1990; Grant, 1998;

Karnani &Wernerfelt, 1985). Predatory pricing is when a firm drives competitors out of the

market by selling at below market rates and

conceding profits in one or more business for

enabling another business to gain revenue or market share. Short term losses for long term

gain are deemed tolerable. It may also deter new


21 Open Journal of Economics and Commerce V1 ● 14 ● 2018

competitors from entering the market. Bundling

is selling the products together to extend the monopoly power of one business into another

related business. Bundling may also be

considered as a form of predatory pricing. Reciprocal buying and selling happens when a

potential customer is a supplier to another

business. The firm establishes an advantageous

buying and selling relationship to gain revenue in a supply chain. Mutual forbearance and

collusion are similar. This beneficial economic

situation occurs when MNEs keep prices high through regular contact with multi-market

competitors. For example, a product may be

ceded to a competitor with the understanding that a concession is made for another product.

Or, a predatory pricing scenario for a product

may be enacted by a market leader in a

competitor‟s market when the leader encourages a competitor to retreat from a market they

recently penetrated that is dominated by the

leader. Multi-unit businesses with substantial market share are at an advantage, as single-unit

firms are not able to exploit these opportunities

for corporate advantage. Market power

synergies can contribute to corporate advantage; however, anti-trust laws and other factors may

restrict opportunity exploitation (Devos,

Kadapakkam& Krishnamurthy, 2009). Even so, pricing strategies are innovative and require an

entrepreneurial mindset in a complex

environment.

Relatedness

Empirical studies typically use operative

synergies for describing the impact of

relatedness as described by the presence of similar activities and shared resources at various

points of the value chain (Davis & Thomas,

1993). Relatedness may also exist between business units within diversified firms (Amit &

Livnat, 1988; Berger &Ofek, 1995; Christensen

& Montgomery, 1981; Grant &Jammine, 1988; Lang & Stulz, 1994; Ramanujam&Varadarajan,

1989; Rumelt, 1982; Simmonds, 1990).

Relatedness is sometimes referred to in the

context of economies of scope (Bailey & Friedlander, 1982; Panzar&Willig, 1981). While

economies of scope refer to economics around

increased production of multiple products, economies of scale are related to cost economics

associated with increasing the output of a single

product. Scope economies often occur together

with scale economies and so are often included in firm expansion discussions (Cappron, 1999;

Collins & Montgomery, 2005). Operative

resources that may be related are tangible and

intangible resources necessary for ongoing

operations that may include product knowledge, product components, and production facilities

that represent production capacity. By contrast,

while operative synergies benefit cost-related profitability, growth synergies substantially

benefit profitability, as they occur when unique,

rare, and complementary resources are

combined strategically.

Diversification

Research by Mueller-Stewens and Knoll (2006)

suggests that operative synergies are prioritized on corporate agendas. Unfortunately, they are

typically explored through the lens of

diversification and acquired through acquisition (Salter &Weinhold, 1978). Related

diversification is described by the deliverables

that come from operational units with similar

characteristics (Barney, 2007; Rumelt, 1974). These common attributes define relatedness

between business units. Most studies have

looked at relatedness and commonality over the business value chain for determining

opportunities for operative synergies (Rumelt,

1974; Zhou, 2011). Rumelt (1974), building on

the work of Wrigley (1970), looks at relatedness by assessing MNEs through the lens of common

skills, resources, markets, and purpose. Rumelt

(1974) shows in his study how diversifiers that were related substantially outperformed

diversifiers that were unrelated, thereby

suggesting that operative synergies yield benefits that are greater than other types of

cross-business unit synergies. Even so, all types

of relatedness may not be synergistic (Davis &

Thomas, 1993). For example, resources that were once related may become unrelated and

even dis-synergistic over time.

Relatedness attributes may vary over time and become neutral or even negative as they may be

influenced by exogenous product or service life-

cycles, or megatrends, which influence market life-cycles. As examples, market or technology

shifting may influence synergistic relationships

between business units in an MNE, making

resource interdependencies irrelevant (Davis & Thomas, 1993; Markides& Williamson, 1994).

Furthermore, relatedness may be an imperfect

substitute for synergy. Direct estimates of synergy benefit provide unambiguous relevant

data about growth opportunity in an

organization (Davis & Thomas, 1993). Further

to this, relatedness, as described by similarities in production-oriented functions, excludes

potential relevant similarities and



complementarities in other non-production

functions. While often ignored, these may potentially influence growth synergies. These

include endogenous and exogenous contributors,

including the exploitation of strategic assets that are not adequately covered in the literature as it

relates to growth synergy realization.

Research has shown that there is an inverse U-

shape to the curve that plots diversification against performance. When diversification is

limited, it is not optimal and it limits the

opportunity to put available resources to beneficial use (Lubatkin& Chatterjee, 1994).

Also to be considered, as the level of

diversification increases, there is a point of diminishing returns (Zhou, 2011). This is where

an additional investment in organizational costs

does not produce meaningful benefits. An

example could be adding customers that do not contribute to profitability.

From this point on, diversification destroys

rather than produces value. Moderately diversified firms are not limited in this way, but

rather create operative synergies from slack

resources, thus, increasing their performance.

Palich, Cardinal and Mille (2000) confirm this relationship.

Diversification-performance literature suggests

that corporate managers should focus on realizing operative synergies within the group of

core related businesses (Amit &Livnat, 1988;

Berry, 1974; Dubofsky&Varadarajan, 1987; Jacquemin& Berry, 1979; Michel &Shaked,

1984; Montgomery, 1982; Palepu, 1985; Reed

&Luffman, 1986). As corporate leaders pursue

related diversification, they should populate their portfolios with common strategic assets

and complementary resource bases, such as

customer knowledge, product knowledge, and managerial knowledge.

Operative synergies should be considered with

these resources over multiple points in the value chain. These points may be linked. Regular

assessment by corporate leaders should establish

the value provided by these linkages, review the

rationale behind the portfolio structure, manage interdependencies that result in coordination

costs, and monitor business for emerging

linkages (Zhou, 2011). While the literature describes efficiency synergies, it does not

provide much information on joint growth

synergies across business units.

To explain further, similarities in the production function are not limited to relatedness as an

attribute; scholars have also started to look at

the resources that support performance-enhancing diversification. Markides and

Williamson (1994) argue that the similarity

between valuable resources, like strategic assets, should be considered for the benefit of

diversification.

These related assets, which are imperfectly

tradable, imperfectly substitutable, and imperfectly imitable, when shared between

business units create a differentiation advantage

in the market (Markides& Williamson, 1994).

The authors list five asset types that contribute

to differentiation advantage, including brand

loyalty, distributor assets, loyalty and pipeline assets, distributor loyalty and pipeline stock,

inputs to the process, technology and systems,

and knowledge assets. MNEs can obtain

operative synergies from strategic assets through asset utilization, new asset creation, asset

fission, or exploiting assets from diverse

businesses, keeping in mind that assets can be used in non-production aspects of a firm (Zhou,

2011). According to Davis and Thomas (1993),

synergy patterns shift with life-cycles. This is

illustrated in the figure below.

Figure 1 Life-cycle curve of a product or service.

This figure illustrates the value of a line of business

(LOB) over time while relating life stages to

opportunity.

A typical life-cycle has several stages.

Following the first successful orders, the volume

capacity increases. Shortly thereafter, the ramp up passes an inflection point where the revenue

expectations start to diminish.

This is the “edge of chaos” because, if caught off guard, the firm starts to panic with the drop

off in sales of a core revenue stream. At this



point decisions are made that are critical to the

life-cycle and which may include cost mitigations for optimizing the margin over the

life cycle revenue opportunity. Shortly, the

opportunity peak is experienced and now the firm has to understand the decline and make

decisions to optimize the tail of the curve. The

firm may be able to extend the tail by adding

value to the product or service, “repackaging” it for another sector, or by bundling it with

something else that has value. Once the

opportunity is lost, it is wise to reallocate resources.

Due to the nature of life-cycles, a related

resource can become unrelated and even dis-synergistic over time as markets evolve, collide,

split, and/or become extinct (Martin

&Eisenhardt, 2001). Furthermore, operative

synergistic relationships between businesses can change over time. Consequently, limiting

synergistic discussions to resource synergy

opportunities leads to less than optimal results.

Resources can be thought of as being

complementary if the sum of their individual

resource cost is less than their value when

linked together (Milgrom& Roberts, 1995).

Consequently, the benefit from resource

interdependency is referred to as super-additive.

Complementary resources are interdependent and mutually supportive but not identical. For

example, Tanriverdi and Venkatraman (2005)

explain that complementary knowledge resources could be exploited across businesses

for influencing market expansion and

influencing corporate performance. Others have

come to the same conclusion (Farjoun, 1998; Larsson & Finkelstein, 1999); however,

knowledge resources should not be considered

to be purely dyadic between two entities, but may be triadic, or more realistically systemic

(Marsden & Franklin, 1993) as described below.

Selective focus is important to the realization of synergistic growth, as it is aligned with the

objective to achieve profitable results. Selective

focus is achieved by allocating energy

strategically to achieve the best results. Available resources can be better utilized

through prioritization, plan, and purpose clarity.

The effectiveness of these resources can be measured by looking at value creation. The

ability to execute through selective focus is

augmented by an appropriate strategic method, a

scope that is optimized, and an organization that is directionally exploitable and scalable.

The strategic method includes aspects that

penetrate boundaries. These may include, as an example, a technology that could break through

the walls of a siloed organization, thus, making

available the revenue that was previously unrealized. Other techniques can be leveraged;

for example, existing resource redeployment can

achieve improved profitability as these

resources are already capable to perform the synergistic task. Additionally, the benefits of a

system can be leveraged to encourage a client to

pay more, as the ability to track orders may be considered to be a value-add. The directional

strategy relates to the MOS and its scalability.

For example, the complete directional extension of a line in the MOS results in increased synergy

exploitation opportunities. Similar skills and

resources can be exploited to maximize profits.

The structure can also scale and be leveraged across divisional lines. For example, a

synergistic activity at the company can be

exploited by another division without incurring proportional additional resource or

infrastructure costs. Lastly, the scope needs to

be optimized. Out-of-scope strategies drain

energy with little return. A focused strategy must include a scope of work that is in

alignment with market trends and which is

locally available to exploit. Additionally, the part of the opportunity that is profitable should

not be burdened with other aspects that are not.

These opportunities should be monitored through metrics to ensure transparency and

facilitate timely decision making. The guidance

of an appropriate strategic method, in an

optimized scope, leveraging the directional capability of an MOS will help to ensure that

only the most profitable opportunities are

selected for focused attention. This relationship between the three key strategic themes on

selective focus is illustrated in the figure below.

The literature is limited in its discussion about the exploitation of resources in an MNE,

especially with regard to primary enablers like

culture and alignment, as examples. The

purpose of strategy is to create focus that leads to desirable outcomes. The scholar suggests that

this selective focus is enacted by linkages

between the strategy method, directional strategies, and scope minimization. There are a

variety of methods that can be used for fulfilling

strategic goals. For example, directional strategy

occurs in an MOS both horizontally across locations and vertically across product lines.

The optimization of scope restricts the area of

concern, thereby avoiding noise and



overwhelming analysis. The recognition of

strategic complementarity allows for selective

focus for growth synergy realization.

Figure 2 Strategic complementarity. This figure illustrates the dependent relationship between the strategy

method, selective focus, directional strategy, and optimized scope, and includes examples of each.

Resources

Functional synergies contribute to corporate advantage when resources are better utilized

because they are difficult to find. In this way the

organization is exploiting the agency and transaction advantages of the firm (Jackson,

2009). A super-additive benefit occurs from a

cost efficiency perspective if it is significantly

less costly to combine two or more highly sought after resource combinations into one

organization than it would be to use them

separately (Panzar&Willig, 1981). These profitability benefits are experienced when non-

imitable resources are shared to stimulate

growth when an opportunity presents itself. This benefit occurs while exploiting the economic

impact of underutilized resources across

multiple units. While physical production has

been the focus of efficiency synergies (Panzar&Willig, 1981), growth synergies may

also occur in non-production activities like

research and development (R&D) (Davis & Thomas, 1993; Wiessmeier, Axel, & Christoph,

2012) and may include intangible resources like

best practices and brand image (Milgrom& Roberts, 1995; Montgomery &Wernerfelt, 1982;

Prahalad& Hamel, 1990; Szulanski, 1993).

Profitability

Studies on operative synergies typically only capture benefits of economies of scope, by

sharing similar or slack resources across

businesses (Shaver, 2006; Panzar&Willig, 1981; Tanriverdi&Venkatraman, 2005; Williamson,

1975). Relationships among business units need

not be limited to economies of scope but also

must lead to value-enhanced revenue, or corporate growth (Davis & Thomas, 1993;

Mueller-Stewens& Knoll, 2006;

Tanriverdi&Venkatraman, 2005) referred to as

positive spillovers (Shaver, 2006). This type of corporate growth associated with the

combination and transfer of complementary

resources is limited as efficiency gains are not necessarily realized through sharing alone

(Eisenhardt& Martin, 2000;

Tanriverdi&Venkatraman, 2005). These value-

enhancing opportunities, or profitable growth advantages, are created by combining

complementary operative resources across

businesses.

Sustained Growth

Corporate initiatives are dedicated to growth

synergy opportunities; however, the sustainable realization of growth synergies has received

little attention in literature, despite often being

identified as a goal for managers (Amit

&Livnat, 1988; Bettis, 1981; Eisenhardt&Galunic, 2000; Martin, 2002; Palich

et al., 2000; Ramanujam &Varadarajan, 1989),

thereby ultimately leading to unrealized value (Goold& Campbell, 1998). Specifically,

research on diversification concerned with

operative synergies explores the strategic rationale of related diversification (Davis &

Thomas, 1993; Tanriverdi & Venkatraman,

2005), but does not reveal anything about

realization. It assumes that cross-business synergies are observed in organizational

constructs and that they are easily realizable

when in fact they are complex and difficult to achieve. With the exception of Martin (2002),

research is too empirically immature to provide

adequate insight into growth synergy realization

from resource combination, or the unique and timely combination of the elements of the

synergies previously discussed.



Synergy realization costs include both direct and

indirect costs. Direct costs could include the cost of coordination and control, while indirect

costs may relate to the need for a compromise or

an adaptation (Campbell &Goold, 2000). Coordination costs may be visible in costs

associated with collaborative linkages between

business units (Porter, 1985). This could include

management time, the cost of a designated liaison, the cost of an embedded team, the cost

of integrating sales forces, human resource

related costs, marketing costs, moving costs, culture assimilation costs, costs of

standardization, the cost of outsourcing, or costs

associated with the installation and maintenance of enterprise resource planning (ERP) systems

(Loomer&Harington, 2003; Zhou, 2011).

Business level managers may spend a

significant amount of their disposable time meeting and negotiating with other business

managers for coordinating activities, problem-

solving, and making decisions. Resources for exploiting opportunities may not be easy to

share due to specialization, for example (Teece,

1980). Corporate costs may increase for the

same reasons if escalation is needed (Hill, Hitt, &Hoskisson, 1992; Michel &Hambrick, 1992).

Furthermore, corporate-level behavior may be

unproductive due to self-interest. For example, disruptive technologies that self-cannibalize, or

inequitable intercompany pricing, may be

deliberate in the business in order to prop up a favored unit or help penetrate a new market.

Corporate managers may not be capable of

resolving conflict as they are not fully aware of

the situation and do not have the needed operational skills for understanding the impact

of a decision. They typically do not have to deal

with collateral damage wherever it may occur. This may lead to less than optimal decisions,

frustrating and alienating business unit

managers (Goold& Campbell, 1998; Goold&Luchs, 1993; Michel & Hambrick,

1992; Vancil, 1980). Business unit managers

may also be frustrated by imposed decisions and

the requirement to resource share (Beer, 1964; Fleishman & Harris, 1962; Gupta

&Govindarajan, 1986; Tannenbaum, 1962,) or

redeploy (Cappron, 1999). This overall organizational inertia introduces waste that

results in additional cost and smaller profits.

Competitive Advantage

When competitive advantage creates a higher economic value for the firm than its rivals can

produce, cross-unit synergies contribute to

corporate advantage (D‟Aveni, Dagnino, &

Smith, 2010). The opportunities, as represented

by the shadedbox in the figure below, can be discovered through various capability analysis

techniques, which is a structured planning

method used to evaluate the strengths, weaknesses, opportunities, and threats, internal

performance reviews, competitor analysis, or

addressable market analysis. The opportunities

are located at the nodes, where they naturally reside as these are the dimensional factors that

would enable the exploitation of the opportunity

by an entrepreneur.

Figure 3. MOS scalability. This figure shows

how the MOS lines can scale depending on the

need and the dimension.

As an example, a client (C6) could want more of

the company‟s products or services. A location

(L7) could expand its product or service portfolio due to a local market opportunity. An

enterprise resource planning system (ERP) (S1)

could be used by other divisions to leverage profitability, whereupon they would share the

cost of the system, improving profitability at the

company. Lastly, a product (Prod 4) could be

sold to other clients, possibly external to the company. The scalability of the MOS,

exogenous to its existing domain, points to

profitability as all of these instances exploit existing skills, infrastructure, and resources. The

figure below illustrates the scalability of the

MOS.

Furthermore, an opportunity could be an

immediate client need, a servicing issue to be

resolved, margin inadequacy, a capital

expenditure (CAPEX) enabled sale, a filler for a capacity shortfall, or revenue that could be

experienced through a critical support function

that has been missing. One opportunity could lead to another. For example, the exploitation of



C2/Prod 4/S1/L5 could lead to a further

opportunity with Prod 1 at L5 and Serv 1 at L1. The link preserves the attachment to any lines at

the primary opportunity. Synergistic linkage

will enhance profitability and minimize investment to realize the opportunity. The

priority of exploiting the opportunities at the

nodes could relate to the magnitude of the

opportunity, the investment needed to exploit it, or the profitability of the opportunity, as

examples.

Figure 4. Growth synergy opportunities prioritized

at the nodes. This figure illustrates the relatedness of opportunities and the capability of the model to be

used for prioritization.

Sustained Advantage

Opportunities can be prioritized based on

corporate growth and synergy value. A resource-based view of cross-unit synergy

creates three conditions by which competitive

advantage is sustained (Barney, 1991; Conner,

1991; Peteraf, 1993; Wernerfelt, 1984). First, the synergistic resource needs to have value.

This happens when these resources are relevant

to key success factors of the business (Grant, 2005). They enable the firm to reduce threats to

profitability and exploit opportunities available

in the environment (Barney, 2007). In the end, these resources need to contribute to the firm‟s

ability to meet customer needs and expectations

at a fair price, better than the competition

(Collins & Montgomery, 2005; Rose, 1990). Second, the resource needs to be in short supply.

If the resource is widely available, the potential

competitive advantage erodes (Grant, 2005). The best outcome for competitive advantage is

that the resource is rare and valuable (Barney,

2007). Finally, synergistic resources must be difficult to imitate, in order to be a source of

sustainable competitive advantage. This is

enhanced if competitors have neither the

financial capability nor time to obtain them (Grant, 2005; Barney, 2007). This situation may

be enhanced through the existence of

intellectual property protection, historical conditions, timing disadvantages, the inability of

the competitor to assemble the needed

resources, and the existence of socially complex phenomena that cannot be sufficiently

influenced (Barney, 2007).

To optimize growth synergy choices, firms need

to balance the potential value with the associated coordination costs. This must be

accomplished with a view towards complexity,

consideration for the overall coordination capacity constraints, and an understanding of the

opportunity itself so that it can be optimally

applied horizontally as well as vertically. Furthermore, the application needs to be

accomplished with consideration for the impact

of synergy realization on specialization, which

may result in a loss of competitive advantage. Organizational capability like managerial

expertise, knowledge creation, and adaptation to

offset limitations, also need to be taken into consideration (Capron, Dussuage, &Michell,

1998; Hill, Hitt, &Hoskisson, 1992; Nelson &

Winter, 1982). All things considered, firms need

to understand and optimize coordination costs that arise from managing complex

interdependencies between business units

(Zhou, 2011).

METHODS

Quality of the Research

Creswell (2014) describes validity in qualitative

research as being the determination of whether

the findings are accurate from the standpoint of

the author, the participant, and the readers of an account. In this case, language and meaning are

the data. Creswell (2014), in parallel with

Lincoln and Guba‟s (1985) approach, offers qualitative researchers eight possible strategies

for checking the accuracy of findings;

triangulation, member-checking, rich

descriptions, clarification of bias, the use of negative or discrepant information, prolonged

time in the field, peer debriefing, and the use of

an external auditor. The author selectively used these strategies to ensure data validity with a

focus on triangulation, peer debriefing, and

member checking.

Endogenous validity refers to the validity of

established causal relationships (Yin, 1994;

Lamnek, 1995) or internal logic of the research

(Punch, 1998). This was achieved by establishing a clear thematic focus that guided

the case selection, abstracting and comparing,



conducting peer reviews of causal relationships,

and by having an open and comprehensive explanation building. A thematic focus was

evident in a clear definition of an overarching

research theme (cross-unit synergies), a narrowing research focus (operative synergies),

and a specific research question (the sustainable

realization of growth synergies) along with a

compatible case selection in which the constructs of interest could be discovered.

Continuous abstracting and comparing (Strauss

& Corbin, 1990, 1996) occurred as the author continuously compared data sets to build higher

order constructs, preliminary results to emerging

data to confirm or refine results, and observed causal patterns within the existing literature.

This improved the validity of causal relations

(Yin, 1994). Peer reviews of causal relationships

were discussed with research colleagues for the purpose of capturing and testing additional

perspectives based on experience in the field.

Additionally, it enabled the validation of internal consistency and theoretical relevance of

the author‟s arguments. The final technique for

internal validity was through open and

comprehensible building of explanations and causal relationships. The results were

documented in such a way that the reader could

reconstruct the causal relationship (Mayring, 1996). Openly, the author indicated initial ideas,

deducted assumptions, and challenged potential

inconsistencies.

Exogenous validity refers to the generalizability

of research results critical for robust theory

development (Sutton & Straw, 1995; Weick,

1995) and depends on the research approach (Yin, 1994). Single case study empirical

findings are difficult to generalize. Yin (1994)

emphasizes that case studies do not allow for statistical generalization. More specifically, it is

difficult to make inferences about a population

based on empirical data collected in a sample. While issues of generalizability from case

studies is severe (Denzin, 1989; Yin, 1994),

single-case studies are recognized to be

substantial from an evolutionary perspective (Stake, 1995). Single case studies can also

provide new ideas and new thinking paradigms.

They can help modify existing theories by exposing gaps and helping to fill them. There

are several facts about this study that support the

author‟s conclusions that the findings and

propositions will be at least somewhat generalizable. Several of the constructs can be

confirmed as being present in existing literature,

indicating general theoretical relevance of the

research (Eisenhardt, 1989). The findings were

confirmed through consultation with participants, who are operationally capable with

varied experience in the industry, suggesting the

potential transferability of the claims. Finally, the findings were somewhat generalizable due

to the continuous comparison of similarities and

differences within case items across different

levels of analysis.

Reliability refers to the possibility that

researchers can replicate the research activity

and produce the same findings (Eisenhardt, 1989; Yin, 1994). A challenge for this

replication is the attribute of qualitative

research, in that it is bound to the context in which it is conducted (Lamnek, 1995), including

time. Reliability in qualitative studies is best

served by presenting sufficient information so

that the reader can draw his/her own conclusions (Yin, 1994). The author attempted to ensure

reliability through the explicit disclosure of the

research design, including a detailed description of the research process, case selection criteria,

interview guide, and methods for collecting and

analyzing empirical data.

Data and Analysis

The purpose of this qualitative

phenomenological research study, using

Moustakas, (1994) modified van Kaam method, was to explore the real-time experiences of

stakeholders, or co-researchers, as they lived

and influenced events occurring around them. Awareness is a transient experience (Freeman,

2000) that may involve exerting influence,

letting go, and redirecting energy and attention

(Depraz, Varela, &Vermersch, 2003). It also involves being present physically and mentally

in daily life. Stakeholders have to anticipate

events, make sense of existing environments, and exert influence over future trends. Weick

(1995) suggests that sense-making is a

retrospective cognitive process that explains unanticipated events. He also suggests that

events in a socially-created world both support

and constrain action. Weick, Sutcliffe, and

Obstfeld (2005) later suggest that individuals form both assumptions and conscious

anticipations of future events. By examining

sense-making and the development of mental models through actual lived, shared experiences,

this study captures the subjective processes that

have been largely ignored in the context of the

connection between organizational design and growth in a multi-unit firm. Using the

experience of stakeholders, the author presents a



conceptualization of how individual participants

in this study made sense of their lived experience. This was an ongoing process for

participants as they refined their understanding

of lived experiences and established new equilibriums.

Each section includes individual textual

descriptions as well as composite descriptions

concisely oriented and illustrated in a theme map structure. Moustakas (1994) suggested that

the integration of textual and structural

descriptions into a composite description, such as a relational table, is a path for understanding

the essence of an experience. The composite

description is an intuitive and reflective integrative description of the meanings and

essences of a phenomenon, of which the entire

group of individuals is making sense. The

participants create meaning through their awareness of the environment, reflection on

their experiences, consultation with others,

focused response to an enquiry, and iterative refinement to these enquiries.

Coding

Data collection was facilitated by an interview

protocol with specific questions oriented in a sequenced schema. Participants were solicited

as volunteers from a pool of leaders based on a

willingness to share information about the transformation of the case company division.

Each volunteer co-researcher participated in the

changes personally. Following each question, the participants‟ response was determined to be

linked to the question asked and was determined

to be meaningful prior to continuing. An answer

could trigger a clarifying question, or a question formed to solicit a more fulsome answer, if

needed. The additional information modified the

answer and once again was determined to be fulsome or not. The data was added then to the

data sheet and coded. Sub-code themes were

also determined and grouped by code and sub-code. The data was surveyed by the author, who,

due to personal experience, was able to apply an

analysis for good (ANOG). Slight modifications

were made as needed to reduce the noise in the data and ensure completeness and clarity. This

was accomplished by consolidating like data

points and simplifying others by stripping out noise and redundancy in the answers. The data

was then re-sorted and generalized through

categorizing. A pivot-table was used to extract

themes in the wording. The curated raw data was then posted in a table. In some cases most

of the themes were unique, in which case a table

was not used. From this data, dependencies,

relationship, and the sequence of events were determined and organized into a theme

relationship map. In some cases the data

collected appeared as though the participant was confused about the question. In these cases the

Author followed up with the participant and

then added the newly acquired information to

the raw data previously collected.

The raw data was collected from each

participant for each data domain and sub-

domain in the sequence in which it is presented in this chapter to promote a progression of

thought. The data is separated into exogenous

and endogenous domains as well with selected focus in both areas. In some cases, like roles, the

participants offered information on themselves

while commenting on data provided by their

peers. Patterns that emerged in the data are presented as textural responses (what

happened), structural responses (how did it

happen), or composite descriptions (what the group experienced). Data responses that

occurred most frequently within the theme

category were given more significance and were

typically mentioned first. Data was interpreted into theme patterns. These were broken into

themes and then concisely into propositions, or

findings of the study. Data items that referred to individuals, functions, line of business,

locations, systems, or company names were

obfuscated, eliminated, or given a pseudonym. The propositions, or findings, were formed and

listed numerically. Within each proposition, a

two-word summary was formed along with a

statement that sums up the finding. For example, a central theme, norm strategy, or trigger may

have emerged from the data as a result of

coding. This data could then be categorized or filtered through the constructs being discussed

that may include the strategic frame, horizontal

strategies, or a narrowed scope as examples. This was the beginning of the theme map, or the

outermost layer. The layers could then be

elaborated on by breaking the outermost layer

into sub-layers until it was reasonable to stop. This theme map was created to better describe

the themes in the data and to show relationships

and sequences between unique data items. Now on to the findings from the study.

FINDINGS

Addressable Market.

In order to realize synergistic growth at the

company, a strategy for acquiring the

addressable market had to be formed. The



entrepreneurial energy of the firm had to be

focused on a strategy for growth and performance over a broad context. The

entrepreneurial patterns of behavior had to be

synchronized to align with opportunities and goals. The strategic plan included; robust

elements that were of a high quality and were

reliable, penetrators to break through the wall

that excluded the company from accessing the neighboring spend, an execution plan that

includes existing market preservation and

strategic-sequenced tasks to capture the addressable market, and the ability to monitor

the results of strategic actions taken. The

summation of the opportunities is the addressable market. Each expansion represents

revenue growth. As this growth is within

existing LOBs, the synergy component is high,

as existing methods, infrastructure, and talent can be leveraged.

Growth

While these strategic elements demonstrate some of the ways that an MOS can scale, there

are many ways that an MOS can grow resulting

in enhanced synergistic profitability. New

opportunities can be quickly exploited, as skills and trained resources are made available to

achieve the revenue. Very little effort would be

associated with building a solution, as it already exists. As product life-cycles come and go in a

dynamic market, a profitable company needs to

have a flexible strategy and be agile enough to realize the positive impact of the appropriate

actions. Nimbleness is an organizational

attribute of the MOS because it can respond

quickly to an opportunity. Clients have indicated that:

The company is a leader and far ahead of the

curve... [in] attention to detail, customer service and [meeting] client needs is unmatched. We

look forward to a growth business and always

look for opportunities to accelerate the work. Thanks for all the efforts. (CS48)

Market Penetration

A critical element to the growth opportunities in

existing markets and new markets in neighboring sectors was penetration strategies.

An entrepreneurial business that is interested in

leveraging synergies to grow profitability must understand the dynamic nature of the market so

that a suitable strategic posture can be taken.

This strategy could be driven by tactical and

deliberate action, or another exogenous force. This section discusses these forces. Penetrators

are illustrated in the figure below. For example,

new products may be introduced as a result of technical innovation that can be applied to them.

These products may be products in the client

portfolio that, heretofore, have not been in the vendor‟s portfolio to service. The introduction

of technology enables growth through synergy.

Another example of a penetrator could be the

bundling of services that include a series of products that are already in the client‟s

portfolio. The bundle deal leverages the

vendor‟s supply chain, speeds up order dwell time, and presents an opportunity for increased

volume and profitability for the vendor.

Figure 5. Market silo penetration in the MOS. This figure illustrates how penetrators can map over the

MOS structure.

The MOS leaders were able to collect a number

of strategies to penetrate these markets. From

the data, six patterns emerged as follows: (a) capability, (b) cost, (c) infrastructure, (d)

products, (e) system, and (f) technical. Within

these categories, 83 rich data descriptions emerged from the data. The researcher will

discuss each one individually.

Capability

The first penetrator to stimulate growth through the exploitation of addressable market

opportunities is capability as illustrated in the

figure below. Capability was broken into seven categories, including (a) dwell, (b) process, (c)

security, (d) strategy, (e) system, (f) technical,

and (h) training. The dwell pattern related to

how quickly the company is able to turn around orders. Order dwell time is a competitive

advantage that can be sold. As other competitors

cannot achieve this and as this is important to clients on a timeline, it is an opportunity to

pursue the spendof the client that is being

consumed by other vendors. In addition, a suite of products can be delivered simultaneously

rather than in a staggered fashion. The capacity



needed to deliver a series of products

simultaneously is significantly different than linear delivery schedules. The dwell time does

not only relate to product, but also relates to

invoicing. Another capability-based penetrator is process. A reliable process can be sold. In the

event that a competitor is having reliability

problems, this is a good opportunity to take the

spend going to someone else. The reliability needs to be present in the network-based

production system. An assignment could go to

any location in the network and it is assumed that performance parity has been achieved.

Furthermore, clients expect consistent

performance without entropy. A process is competitive if it has installed controls to sustain

excellent performance. Next, security is

becoming more important and is a market

penetrator. This capability includes integrity in the marketplace for the company‟s security. The

security management system is guided by a

standard that is robust. This standard must be consistently deployed and maintained in all

locations and workflows. Another capability-

based penetrator is strategy. Clients want to

have strategic discussions about the future of the market. They desire to engage the company in

developing projects that relate to new formats

and tools. These endeavors need to have a

development roadmap, a schedule, and deployment. Additionally, the ERP system itself

creates capability and is a market penetrator.

Clients are given access to the system to track their orders. This is desirable and the user

interface (UI) is influenced through client input

and enhancement. Technical capabilities are

also a market penetrator. The ability to solve client problems is appreciated.

“Technical and supply chain resources [are]

available enabl[ing] problem solving.” (MP93)

There is also the expectation, on the part of the

client, that the company is a thought leader in

the business generally. One way to provide technical capability as a penetrator is to make

technology available to clients. The company

attracted technical vendors on-site by providing

office and workspace within existing facilities. When clients toured facilities, they were able to

make the visits more valuable by exposing them

to multiple vendors. The company also deployed a university (MU) that enabled clients and

employees to leverage the facility. When a large

client saw the company university, the MOS

leader said:

Figure 6. Market penetrator: capability. This figure maps capability as a theme category into descriptive sub-

groupings.

I demo-ed MU for him and he could also see all

of our trainings in the system, as well as process training when we pair [the university] with the

[knowledge base]… [the client] said

specifically, this is a leader of all the vendors by far and is a differentiator when it comes to

making decisions about which vendor to go to

for any services. (MP44)

Clients also commented on the need to train

employees at the company in client surveys.

“Please continue to support growth with

staffing and training as you are trend setting for

the future.” (CS58)



Cost

The second penetrator theme that emerged in the data was cost. Three areas were identified as

candidates for cost reduction. One of these was

quality control (QC). The ability to carry out QC tasks with consistent reliability contributed to

process robustness and strengthened the

company‟s brand. When an issue was missed,

there was significant opportunity for liability from downstream processes that would incur

rework. In addition, an error would result in a

time delay that could compromise the overall schedule. A time delay may result in the need

for expedited fees from downstream vendors to

recover the lost time in the schedule. A second capability was through the offshore capacity that

was available. This capacity allowed for

significant expansion and contraction of

capacity at a much lower cost. The third penetrator was through the implant population at

the client‟s location. These implants were

helpful in directing work to the company. They are typically placed as part of an offer. This not

only enabled the deal, but also redirected

additional work to the company that would have

otherwise been given to competitors.

Infrastructure

The third penetrator was infrastructure. The

capacity and capability afforded by the infrastructure allowed for significant expansion

and process reliability. Three theme categories

emerged in the data: security, process, and system. The security capability related to the

ability for clients to feel assured that their work

was protected and available when they wanted it

for any reason, even after delivery. Disaster recovery plans (DRP) are robust and business

continuity is critical to client schedules.

Cyber-attack contingency plan – Strategizing using [Disaster Recovery site] for client DR –

Having a well-planned comprehensive

contingency plan with clients in case of cyber-attacks could take our partnership with clients

to the next level and can make them want to

work with the company in order to lower their

risk. Also, we can make a case that small vendors are vulnerable to cyber-attacks and DR.

This can be used as a penetrator and the timing

is good now because of [the threat] situation. (MP26)

The ability to recover within a suitable amount

of time is documented in the DRPs. The ability

to continue to ship was documented in the business continuity plans (BCP). Process

capacity is a penetrator that infrastructure

enables. The availability of storage capacity at any location and the ability to share capacity, or

reallocate it, created a flexibility that can only

be obtained from a pooled capacity. The network-based production scheme included the

transfer of work to locations where storage was

available. Assets, whether physical or digital,

must be received and stored. Without the availability of the components, the work cannot

be executed. Lastly, the infrastructure includes

tools. These tools allow for the control of crowdsource management and the automated

verification that deliverables conform to

specifications. In some cases these tools are proprietary to the company and so make it

possible for a competitive posture.

Products And Services

Accountability for workflow and efficiency channels is enabled by creating clarity around

the ownership of product and service categories.

The MOS leaders were aligned, rather than competitive, within their product categories and

in their sales channels. Internal competition was

an unnecessary method by which clients could

consume company margins. In the case of sales channels, this clarity retarded encroachment,

discouraged cannibalization, and enabled

accountability for performance through sales force effectiveness (SFE) based measurements.

In the case of operative channels, this allowed

for alignment between cost (where it was incurred) and revenue (where it was being

recognized). A total number of 28 product

categories were identified including 87 unique

products that represented the company‟s portfolio. These were categorized by MOS

leaders into three product sectors. An MOS

horizontal leader was assigned to each sector with accountability for the sector profitability.

Any of these products, or their associated

workflows, could be exploited in any adjacent sector. In some cases work in one sector was

dependent on work in another sector. Revenue

for adjacent sector work was attributed to the

horizontal leader that owned the workflow exploited by that sector. Furthermore, scalability

was supported as new products and services

added to the portfolio were allocated to categories in which they had the most

synergistic attributes regarding skills, workflow

steps, infrastructure, and other relevant factors.

With the product-service category clarification and accountability, accurate metrics could be

leveraged for discovery. Additionally, the

impact of focused actions could be quantified in



the now accurate financial models. The

following propositions summarize the key findings of this section:

Proposition1(cross-sector)

Entrepreneurial leadership that owns a product workflow can be incentivized to pursue cross-

sector opportunities.

Proposition2(portfolio assignment):

An assigned portfolio enhances accountability for profitability results and focuses growth

synergies that are constructive.

Systems

The fifth penetrator category that emerged from

the data was the ERP system. This is illustrated

in a theme map as shown in the figure below. The system was a competitive advantage due to

its maturity, feature set, and applicability to the

relevant workflows. The system included

enhancements that corrected errors that have previously occurred, and so it promoted

reliability.

The data produced five themes: integration, intelligence, performance, process, and

transaction. The intelligence aspect of the ERP

system included integrating client divisions into

the system from a tracking perspective. It also included additional systems that can be used

internally, to collect all quality information as

an example. In this situation, if the company has the best reliability performance, the quality

database makes this visible.

For those customers that understand this service, we have a huge advantage in terms of

quality and capability… we have the company’s

innovative workflows to make clean, high

quality [LOB] to invigorate the value in [client material] previously written off as too difficult

to deal … only with a facility like [location]

with its specific services under one roof can any of this be achieved cost effectively and in a

reasonable time frame. (MP40)

Additionally, the full range of services can be offered to distributors. They can also track the

status of their orders. This transparency also

reduces cost as the number of emails and phone

calls are significantly reduced. The second penetration aspect of the ERP system that

emerged in the data is related to data and

business intelligence (BI).

“[We are] using business intelligence from

information in the ERP to help clients with

decision making – something similar to what we

have in [our] recommendation engine but

leveraging large data in the ERP.” (MP17)

With a high volume of data being collected on

the work being done, analytical capabilities

emerge. This information can then be used internally and externally for decision making.

Clients can be offered information about the

work that is being done for them to help them

make decisions.

“As we are doing work with the [client], we are

being relied on by the customer to help them

make the best decisions about how to execute on their program production to ensure quality and

efficient throughput for distribution.” (MP470

Internally, data from all clients can be used to provide information about trends, etc. This

information can help with internal decision

making. A fundamental aspect of this is the

data. Making sure that the data is fulsome and acquired in an architecture that is meaningful is

a primary function of the database. The energy

needed to go back and fill in fields on historical data that are now desired is very wasteful.

Entering the order and asset data in at the

beginning is therefore, fundamental just as it is

having a field architecture that is accommodating and fulsome. Having a system

that is able to capture and track asset and

configuration issues is needed to ensure that deliverables meet specifications. Exception

management must be invoked to alter the

disposition of configurations or assets that are quarantined once issues have been identified.

The issues may require additional information.

The ability to add notes is then helpful so that if

someone goes back in the system to move the order they see the note. With the trackers

embedded in the system, calls and e-mails are

eliminated and data is available for reports. These reports are helpful for synchronizing

quality performance perceptions with clients and

for monitoring trends. Process-related aspects of the system provide an opportunity to penetrate

markets. The system provides opportunities for

automation. In the case where pricing pressures

mean that market entry is not possible, automation pricing can be used. If assets are not

fit for use, overage opportunities exist and can

enhance profitability, assuming that the activities associated with them have a margin.

The system provides tracking information

internally and externally. Internally, this reduces

cost due to the reduced need for altering the status or an asset or a configuration via e-mail or

phone. Operators can see their cue and work it



down. Externally, clients can see if there are

issues with their assets and remedy the situation without having additional communication.

Additionally, automatic updates and delivery

notifications are sent to distribution lists. This creates value for a client that needs

transparency. The system can also be used to

retrieve assets as all assets are visible depending

on permissions for the view. This ability is a market-leading feature, valuable to clients who

want to see their properties. The last value-

producing penetrator that was brought up was the efficiencies that the ERP provides relative to

transactions. With the high volume,

customization of each delivery, uniqueness of the assets, and specification requirements, the

complexity is very high.

Figure 7 Market penetrator: system. This figure

maps systems as a penetrator theme category into

descriptive sub-groupings.

The product is so complex / complicated now,

we need to be involved literally at the beginning … complexity is huge now and ever growing in

our future. It will kill the little guys and show

where the company really excels. (MP49)

The transactions can be purchase orders, invoices, sales transactions or deals, and asset

receipt or the delivery of a final configuration.

Technical

The last penetrator category that emerged from

the data was the technical penetrator. This

included six themes. The first was related to technical projects with distributors. Often

distributors were not sure about what they

wanted or how to check that it was within

specification when received. The company was capable of setting up a distributor with regard to

understanding the specification that they would

need, as well as providing confidence that what was received was correct through the use of

automated verification tools. In the event that

the distributor was using automated tools, the company was able to synchronize its tools to the

distributors following consensus on the

specification line items.

“We can push the technical envelope.” (MP94)

MOS leaders also suggested that these

verification tools provided a competitive

advantage for the company and provided confidence in delivery capabilities. In some

cases, workflows at the distributor needed to be

influenced. The company was able to provide value by providing advice on production

workflows. In addition to verification tools, the

company was able to create packaging tools. These tools made sure that a package had

everything in it, and that each item was in

compliance with the relevant specification

before it was delivered. This saved cost for rework and redelivery while creating confidence

with clients. The company was also able to

provide additional security-related features in the workflows that were of value to clients.

MOS leaders indicated that there were

opportunities in other sectors that should be

pursued. These opportunities could leverage penetrators to achieve increased market share

using synergistic growth strategies. The figure

below illustrates the strategy for sector penetration. The target sector may be existing or

new. The market opportunity within the sector

may be incremental, cross-sector, or discontinuous. An incremental opportunity is an

opportunity for more revenue within an existing

sector (exploitative space) or in a new sector

(explorative space). In the existing sector, this revenue could include increased market share

that has not previously been penetrated. In the

new sector it could be more revenue in a new sector leveraging the experience in an existing

sector. The existing sector could be a reference

used to get the work in the new sector. This cross-business strategy could leverage the

penetrators mentioned above. For example, a

bundling strategy may be used to bridge the

existing and new sectors.

The combining of contiguous supply-chain

services is compelling to customers. We can

create a package that efficiently leverages our account management and operations, removing

redundant order entry and communication with

the customer and allow us to coordinate and

consolidate processes maximizing profits. (MP33)



Penetrators may also be used to plunge into

explorative space even though no references may exist to lend credibility to the service to be

offered. This would be a “cold call”. Penetrators

may also be used in explorative space within a sector by pushing upstream within a client‟s

portfolio. In some cases this may be unfamiliar

territory. Integrative cross-business market

penetration strategy can occur when an existing product or service is leveraged to push upstream

in the client‟s supply chain to pursue market

opportunities in a discontinuous sector. This strategy may also be used to penetrate related

new sectors while leveraging a track record in

an existing sector.

Figure 8 Sector strategies. This figure illustrates

how penetration strategies can be mapped in a

dynamic market.

A sector mapping exercise enables the mapping

of client needs to the LOB and location where the work could be done most efficiently as

illustrated in the figure below.

When a sector is targeted and an opportunity

within the addressable market there is achieved, a better understanding of the customers‟ need

can be documented in the form of a

specification, service level agreement, volume commitment, and delivery schedule.

With this in mind, the need can be mapped to an

operational solution in the form of a workflow

that takes input assets and transformational elements that manipulate these assets into the

correct configurations. Each of these workflow

steps is a billable line item in the invoice. These are then mapped to the functional area that is

best suited to perform the task. By making this

assignment existing systems can be leveraged in a synergistic way, optimizing profits.

Figure 9 Sector growth synergy mapping and

execution. This figure illustrates how sector client

needs can be mapped to synergistic opportunity at

existing locations.

Another way to look at this is in Figure 86 below. Each LOB that is sold is used in a

number of business units as reflected by BU#.

These need to be identified. These business units use workflows that are likely similar as

reflected by WF#. For example, there could be a

number of workflows for quality control that are used to check products in an LOB that is present

in a number of business units. These QC

workflows can then be consolidated and

reassigned to optimize performance and cost through the exploiting of best practices,

expertise, cost, and synergy. A consolidated

approach can increase the focus on excellence while simultaneously achieving parity for the

function in all business units. This can be

accomplished assuming that synergies can be

discovered and then consolidated.

In summary, the data suggests that achieving the

profitability of addressable markets often

requires market penetrators and timely strategy execution. MOS leaders identified penetrators

that could be used situationally to capture new

and increased market share. The researcher discussed types of penetrators used to realize

profitability. These were synergistically

exploited as they were already available or

could be simply customized or applied situationally. Penetrators applied to the MOS

design can leverage existing capabilities,

infrastructure, products, systems, and technical expertise at competitive prices. Capability

enabled a competitive stance. A cost advantage

further made possible the penetration of markets by making “bundle deals” available with shared

discounts to business units involved. An

effective infrastructure can be leveraged for

volume deals that competitors cannot



accommodate. Products must also have

consistent integrity against requirements and delivery expectations. Clients desire that their

vendor has the technical ability to solve their

problems. Vendors must therefore be able to create new products and services. Strategic

capabilities allow the entrepreneur to be

liberated and motivated. Synergistic penetrators

are less costly to create and deploy and thus, enhance margin potential. Penetrators help MOS

leaders realize synergistic growth. The

following propositions summarize the key findings of this section:

Proposition 3 (situational tactics):Strategic

tactics must be viewed as situational to exploit penetration opportunities in a dynamic market.

Proposition 4 (MOS scaling):The MOS creates

a competitive advantage that can scale through

the addition of LOBs and locations while preserving talent, process, knowledge, and a

penchant for excellence.

Proposition 5 (infrastructure reliability): Infrastructure reliability is a penetrator in an

increasingly insecure and liability-oriented

commercial environment.

Proposition 6 (enhanced value): The creative and timely application of enhanced value may

enable new profit-producing opportunities to be

exploited.

Figure 10. Synergy optimization. This figure

illustrates how synergy discovery can lead to

synergistic consolidation using an LOB wheel

structure.

Proposition 7 (tailored UI): Customizing the ERP UI to clients‟ wishes makes it difficult for

clients to divorce themselves from the familiar

system interface and the valuable business

intelligence that has accumulated.

Proposition 8 (technical prowess): Technical

ability is a penetrator because it inspires confidence in the company‟s ability to solve

problems the client does not understand or

cannot solve.

CONCLUSION

The intent of this paper was to show that an

MNE can realize growth through pervasive and coordinated entrepreneurialism in spite of its

size and the opportunity for conflict from self-

interest. In this article, the author added to theory regarding entrepreneurialism in practice

by discussing how a case MNE was able to

grow synergistically and be agile in light of

market demands. The propositions that emerged from this case added to theory as they described

the world that the case company experienced

(Jensen, 1994).And so, the author added to theory by establishing propositions for growth

through entrepreneurialism in practice

throughout a federated organizational design that emerged during the study.

The findings established that coordinated

entrepreneurial efforts can help an MNE exploit

opportunities in an addressable market. The synergy aspect in an MNE is high, because

existing methods, infrastructure, and talent can

be leveraged to contribute to profitability. Furthermore, an MOS can grow resulting in

enhanced synergistic profitability by leveraging

both LOB and sector based relatedness. This

produced three propositions that described how an MOS can achieve profitable nimbleness, can

exploit related and adjacent spends, can expand

strategically by penetrating barriers competitively. Capability is measured both

internally and externally. It is critical to

performance and in meeting customer expectations for a competitive advantage. Next,

price erosion should be assumed. Therefore,

cost reductions must follow. Entrepreneurial

efforts are critical to meeting cost goals that support profit margins. While infrastructure

design is critical cost, the utilization of capital

intensive production enablers relates directly to cost. While internal expectations are that the

cost of infrastructure is minimized, clients

expect reliability and availability. To facilitate this growth propositions regarding products and

services recommended that products have cross-

sector capability and that accountability for the

portfolio comes when it is assigned correctly. MNEs need to migrate to these positions

through effective change management.

Propositions suggested how to get this done by



recommending that to achieve a high return on

investment (ROI) on efforts, the company would need to have planning rigor, transitional

capacity, and a transitional organization.

Systems enable transactions, integrate processes, provide intelligence, enhance

performance, and monitor the process.

Technical capabilities are impactful.

Propositions showed that technical capabilities should include situational capabilities and be

able to scale.

Technical abilities need to be reliable while they add value to products and services. The

interface with the system needs to useful and

intuitive.

The technical prowess of the company is

expected as clients expect that the vendor is a

thought leader and is innovative regarding

product and process.

Lastly, the implications of this study are that

entrepreneurial collaboration within the

federated structure of an MNE, is critical to achieving financial and performance goals.

Leadership attributes not only encourage the

flow of profitable opportunities but also enable

the connectedness between centralized support, through the BUs to the network, all of which

benefits from open innovation.

The propositions that emerged from the data recommended that only mature solutions be

duplicated, knowledge is essential to innovation

launch, and having the right resources at the right time it critical. Ultimately,

entrepreneurship in practice is pervasive through

many elements of a multinational organization.

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Citation: Joel Bigley, Raquel de Guadalupe Flores Murguía."A Holistic View of Entrepreneurship in

Practice in a multinational enterprise" Open Journal of Economics and Commerce“, vol. 1, no. 4, pp. 19-39

2018.

Copyright:© 2018 Joel Bigley, Raquel de Guadalupe Flores Murguía, This is an open-access article

distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use,

distribution, and reproduction in any medium, provided the original author and source are credited.

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